Well the 2014 Holiday Selling Season is behind us. I don't know about you, but this was our best 4th quarter since 2007 before the financial
meltdown in 2008. I know a lot of you will miss the big selling days, but don't despair - January is actually not a bad month. There are two factors - Lots
of folks get Amazon gift cards for Christmas and a lot of folks return gifts for credits and then they go shopping for what they want.

If you look at the masthead of this newsletter is says Volume 15, Issue #1. That's correct, this starts my fifteenth year of publishing this newsletter. It
has been a labor of love. For the first ten years I only published once a month, but in 2010 we went to twice monthly (except December).

When I started this business 15 years ago by writing my first book, The eBay Power Seller's Manual which I first sold only on eBay, it was just a few
months later that I decided to start a newsletter. The newsletter has always been free. If you look above at this month's quote - " You can have everything you want in life if you help enough people get what they want in life." Well that is sort of my philosophy. I reasoned
that if I gave away really good quality information for free, that people would not hesitate to pay for my paid information. And it worked. Over the years
I have realized almost every dream I have had.

The lesson here is: Give some thought to that. Find ways to help others succeed and you will find success coming your way also. Believe me -it works!

In the last issue I told you that I will be raising the price of the
Complete Amazon Marketing System soon. This is due to higher shipping
costs and a large price increase from my print on demand printing company.
So the price will go up on January 12th. If anyone wants one at the current
price you may want to act now.

eBay has introduced a new out-of-stock option for sellers to use on their multi-quantity Good 'Til Cancelled listings.

I don't know how many of your use Amazon FBA to ship to your eBay customers but it didn't work out too well for me this year. The problem is my products
were selling out so fast on Amazon that I had to keep killing my eBay listings before something sold.

I had over 300 SKUs listed on eBay of items I am also selling on Amazon. By the time we got close to Christmas I only had about 40 of those SKUs still
listed as all of them had sold out on Amazon despite ordering far larger quantities this year. Even though I ordered huge quantities this year it was not
enough. I had over 200 products completely out of stock by December 10th. So the lesson here is to really ramp it up next year.

We still have seats available for our Wholesale Sourcing Seminar in Las Vegas in conjunction with the ASD trade show, but the event is selling out fast. I
know that money is tight this time of year, so we have a 3-payment plan to help those of you who may be tight on cash.

The seminar is the Saturday and Sunday before the ASD Wholesale Trade show. So this is a chance to learn wholesale sourcing from four experts -and attend
one of the largest wholesale trade shows in the world.

For those of you who don't know the difference, just a quick review. There are two ways to sell on Amazon: Merchant Fulfilled (MF) or Fulfillment By Amazon
(FBA). When you merchant fulfill, you list products on Amazon and when they sell you package and ship the goods to the customer. With FBA, you label your
products, send them into Amazon and when they sell Amazon handles all the fulfillment and customer service.

There are pros and cons to each and making a decision what to do all depends on your products and business model. So lets look at both.

Merchant Fulfilled (MF) - Pros

The biggest "pro" is that you make larger margins because when you use FBA Amazon charges fees for storage, handling and of course the selling commission.
With MF you only pay the selling commission. So you tend to make greater margins on each sale. Of course you still have the issue of product storage to
contend with, but you can typically store items for less than Amazon charges you.

Another "pro" is inventory timing. With FBA you have to really stay on top of your inventory so when you are close to running out of items you have to
order in time to get the product to you and then get it to Amazon. When you are merchant fulfilling once you have the product, there is no delay in selling
it as there is with FBA. And since you don't have to order so early, your cash flow tends to be better.

Then there is the issue of large items. Amazon charges really high fees to handle and pick & pack oversize items. So if you are selling anything heavy
or overly large, in general you will do much better if you store and fulfill yourself.

Merchant Fulfilled - Cons

The biggest "con" is the work. If you are really selling a lot of products then that is a lot of packages to wrap and ship every day. And don't forget the
cost of boxes, fillers and shipping materials, and storage for those materials.

The Volume "Con" - If you are a low volume seller just selling a dozen or so items a week then you can do this yourself. But what if you find a few really
hot selling products (something we all want to do), how are you going to pack and ship and handle the customer service emails for 100 or 200 items (or
more) per week. At that point you need to hire some help? Yes -you make higher margins when you MF, but those additional expenses can eat into your
profits.

Inventory record keeping is another "con." When your items are in Amazon's warehouse you can just go online and look at, or download, detailed inventory
reports. But if you are merchant fulfilling you will have to create a record keeping system in Excel or buy a software package to stay on top of your
inventory.

Then there is the issue of sales. I will cover this in FBA Pros, but the short answer is you sell more and turn your inventory over faster when you sell in
FBA.

Fulfillment By Amazon Pros

OK, let's look at FBA. I will address the issue of sales volume first. Up until 2010 we were exclusively merchant fulfilling. When we moved into FBA in
2010, our sales went up by a factor of 6X within a few weeks. The more products we sent into FBA the faster it sold. When you MF an item, say you make a
$20 gross profit after fees. If you FBA the same item, you may only make $12. But if you sell one per week MF your weekly profit on that item is $20,
whereas if you are selling six per week in FBA, then your weekly profit is $72 on that one item.

That brings us to inventory turnover. If you sell more items faster in FBA that means you are turning your inventory over more often. There is a very basic
rule of business - the more times you turn your inventory over the more money you make. I have written about this issue in previous newsletters so I am not
going to go into the details and examples here, but if you have not seen those articles, please believe me that this is true.

Then there is the workload. If you are a small operator working out of your home and that is how you want to keep it, you can handle a much larger volume
of products, orders and sales via FBA than you can merchant fulfilling. I currently have about 1000 SKUs selling on Amazon and we can grow that to about
1500 with just my wife and I doing the work. Since we sell approximately 30 items a day now, we would not be able to handle that volume of daily shipments,
unless we hired an employee. Since our goal is to continue working from home and we don't want to deal with employees, FBA works perfectly for us and we
still have some room to grow our business.

Fulfillment By Amazon Cons

The biggest FBA "con" is the biggest pro for merchant fulfilling. The fees are much higher. I used the FBA Calculator to come up with this example for one
of my products. You can see that the difference is not very great ($0.89), and you will also note that I used values of zero for the various costs such as
weight handling and pick and pack because you would do them yourself. But, if you were selling in high volume, and were paying employee(s), then you would
have to add those costs in.

The other big issue we mentioned as a Pro under MF is dealing with oversize items in FBA. The item shown above is a standard sized product, but if it were
oversized then my margin on the FBA item would be about $3.00 to $4.00 less.

Then there is the "con" of shipping to Amazon. Although Amazon gives you some really low rates when you ship to them, it is an added cost that is not shown
on the revenue calculator and it takes time. The extra time spent in transit to Amazon ( 4 to 9 days) and the time it takes Amazon to received the
shipments and make the items available for sale (1 to 2 days) can really add up. This is a big issue because that means you have product that is not
available for sale for a period of between 5 and 12 days. We do about 300 shipments to Amazon per year so that factor adds up to a lot of potential missed
sales and cash tied up in non-performing inventory during that time.

Then there is the split shipment "con." When you create a shipment to FBA, Amazon decides which warehouse it goes to. And most of the time they will split
your shipments up between two or even as many as four warehouses. So that is several shipments you have to prepare. There is a way around this. Amazon
offers what they call Inventory placement service whereby you pay 30¢ per item shipped and they will let you ship to just one warehouse. If that
warehouse is close to you that means you will really save on shipping costs which can offset most or all of the extra 30¢ per item, but if the
warehouse is across the country then its just an added cost, but a huge time saver.

Another "con" is the issue of Hazmat products and some other products such as liquids in glass bottles larger than 4 ounces that cannot be shipped to FBA.
Hazmat is essentially any flammable, corrosive or pressurized item, which includes perfumes and colognes, many cleaning products and some food products.
Even if you want to sell these items via FBA you cannot.

So there you have it. As I said at the beginning the decision really comes down to your personal goals and the business model you want to follow. If you
are young and still have a lot of energy (and money) you can open a warehouse, hire employees and grow the business as large as you want. There are plenty
of million dollar plus merchant and FBA sellers. But if you just want a small home business you may find that FBA will be much easier on you.

2. Amazon Sellers Sold Record-Setting More Than 2 Billion Items Worldwide in 2014

This is a press release from Amazon that contains some really interesting facts and information for Amazon sellers. It is not mentioned in the press
release but Shmuli Goldberg of
Feedvisor
reported that:

10 million NEW members worldwide tried Prime this holiday

Amazon Fire TV is the best-selling streaming media box on Amazon.com this holiday season

Amazon customers purchased enough Rubbermaid storage containers to pack a lunch for the entire population of Montana

Amazon customers purchased enough Elsa dolls to reach the top of Cinderella's castle 855 times

If every If every shoe from each pair of pumps Amazon Fashion customers purchased this holiday season were stacked on top of each other they would
equal 52 times the Empire State Building.

He also added the following comments:

Mobile is now mainstream:

With 60% of Amazon.com customers shopping on mobile devices, Mobile is now a mature, legitimate eCommerce platform in its own right, and is no longer a
"niche" source of income for online sellers. This has and should change the way many online businesses treat the platform.

Prime is a strong direction for Amazon:

This year brought record growth to Amazon's exclusive Prime program. More than 10M new members worldwide tried Prime for the first time, with almost a
dozen new features and benefits added to Amazon Prime over 2015, including Prime Music, Photos, Pantry and Same-Day Delivery. Amazon clearly see Prime as a
robust and diverse growth driver for the company, so expect a lot more added-value features in 2015.

There is a clear winner in the Amazon-eBay war

: With 25% growth in Amazon sales compared to 2014 over Black Friday, Amazon completely eclipsed eBay's 3% growth in the same period. Knowing full well
that the upcoming split between eBay and PayPal may cripple their smaller competitor, Amazon is getting ready to pick up the pieces and take as much of the
opening market share as possible, hoping to strengthen its position as much as it can before Alibaba takes a strong punt at the US market.

Now here is the Amazon Press Release

- Amazon introduced the Amazon Seller App to help on-the-go sellers manage their businesses on Amazon direct from their mobile devices

- Sellers on Amazon from more than 100 different countries around the world fulfilled orders to customers in 185 countries using the Fulfillment by Amazon
service

- More than 25 percent of Login and Pay with Amazon payments were made using a mobile device

Amazon today announced that sellers on Amazon sold a record-setting more than 2 billion items worldwide in 2014. The number of sellers on Amazon adopting
the Fulfillment by Amazon (FBA) service to help scale their businesses and delight customers with Amazon's award-winning fulfillment and customer service
also grew more than 65 percent year-over-year worldwide. There are currently more than 2 million sellers on Amazon worldwide that account for over 40
percent of the total units sold on Amazon.

2014 Amazon Services Growth

- In 2014, more than 2 billion units worldwide were ordered on Amazon from sellers with businesses of all sizes.

- In 2014, active sellers worldwide using the FBA service grew more than 65 percent year-over-year.

- Product selection available through FBA on the Amazon.in (India) marketplace more than tripled year-over-year.

- Holiday deals offered by sellers on Amazon worldwide grew more than 250 percent year-over-year during the 2014 holiday season.

- Units sold by sellers on Amazon worldwide offering holiday deals grew more than 400 percent year-over-year during the 2014 holiday season.

On Cyber Monday, more than 16 million units were ordered worldwide from sellers on Amazon.

- On Cyber Monday, orders processed by businesses using Amazon Payments grew by more than 60 percent year-over-year.

- More than 25 percent of Login and Pay with Amazon payments were made using a mobile device.

- Orders processed by businesses using Login and Pay with Amazon grew by more than 200 percent year-over-year during the 2014 holiday season.

Highlights

- Amazon introduced the Amazon Seller App to help on-the-go sellers manage their businesses on Amazon direct from their mobile devices. The Amazon Seller
App, available for Android, iOS and Fire phone, makes it easier than ever for sellers on Amazon to quickly manage inventory, source and list new items on
Amazon, and quickly respond to customer inquiries.

- Amazon expanded Sunday delivery through the U.S. Postal Service to thousands of cities across the U.S., enabling FBA items from sellers to reach
customers on Sundays.

- Many FBA offers from sellers are now available with same-day delivery in 12 metro areas across the U.S.

- Amazon improved the delivery experience for customers in Europe with the introduction of Borderless Fulfillment. Amazon.co.uk, Amazon.de and Amazon.fr
Prime members now have access to free Two-Day Delivery for items from sellers using the FBA service stored in Amazon's European fulfillment centers located
outside their respective countries.

- Amazon launched Multi-Country Inventory in the EU, an international fulfillment program that has enabled cross-border FBA sellers to place millions of
high-demand items closer to customers. Products are stored in Amazon's fulfillment centers across Europe so they ship faster to local customers.

- Amazon unveiled the 'Make an Offer' experience (www.amazon.com/makeanoffer) that allows customers to negotiate prices on more than 150,000 items across
Sports and Entertainment Collectibles, Collectible Coins, and Fine Art from sellers on Amazon. The new feature allows customers to offer to buy items at
even lower prices, and if agreed upon, customers can then purchase the items at a savings from the listed price.

- Amazon expanded its Amazon Currency Converter for Sellers (ACCS) service to cover eight currencies. International sellers can be paid directly into their
local bank accounts in local currencies including the Euro, British Pound, U.S. Dollar, Australian Dollar, Canadian Dollar, Hong Kong Dollar, Indian Rupee
and New Zealand Dollar.

- Amazon launched North America Unified Accounts to simplify international selling in North America. Now, when a seller signs up to sell on either
Amazon.com or Amazon.ca, they have access to both marketplaces and can more easily create and manage their offers in both the U.S. and Canada.

- Amazon launched the Build International Listings tool in North America, enabling sellers on Amazon.com and Amazon.ca to automatically create offers and
manage prices in both marketplaces.

- Sponsored Products, an advertising program for sellers, introduced six new placements for sellers including product detail pages and mobile search pages
to attract customers to their offers.

- Amazon launched the 3D Printed Products store (www.amazon.com/3dp) that now gives customers access to more than 6,000 unique print-on-demand products,
many that can be customized by material, size, style, and color, and personalized with text. The store includes convenient search tools, interactive 3D
preview functionality and a product personalization widget. Since launch, the number of items listed in the store has grown by 500 percent.

- Amazon opened the Collectible Coins store (www.amazon.com/collectiblecoins) that now gives customers direct access to more than 25,000 unique U.S. coins
from over 160 industry-leading dealers showcasing a wide variety of professionally graded and authenticated coins. The new store is one of the largest
online destinations to discover and purchase graded U.S. coins, featuring easy-to-use search tools. Historical collections are available including buried
treasure coins recovered in the Saddle Ridge Hoard and 57th Street Hoard.

- Sellers on Amazon added thousands of "Certified Refurbished" offers (www.amazon.com/used) from leading electronics manufacturers by focusing on high
quality used selection.

It's a New Year and if you are like most of us we all make New Year's Resolutions, which tend to be kept for a while, but are eventually forgotten. When it
comes to your business, however, its not so much a resolution you want to make, but some concrete steps that can help you reduce your workload and grow
your business more profitably. Making these steps early can help you grow just that much faster. Many of these are no more than simple housecleaning steps,
but they are very necessary if you want to reduce your expenses and workload and increase your profits. These are the things that occupy my time in
January.

Examine your sales history and inventory
. Now is the time to identify your top selling products and your dogs. The first thing you want to do is get rid of your dogs. Lower the price and
use the funds you get back to put into more saleable merchandise.

The other thing I do when I examine my top sellers is to look for similar and/or related items. For example I have a line of specialty cooking
oils. They all sold very well so now I am looking for new flavors to expand the line. If you have a certain type of product that sold well its
likely that other similar products will also be good sellers.

Clean up your listings
. This is the time of year to go through all your eBay and/or Amazon listings and check them for up to date information, keywords used, photo
quality, look for misspellings and grammar errors and so on. Since I have close to 1000 listings on Amazon and 200 or so on eBay, this will take a
long time and its pretty boring -but highly necessary work. So set up a goal to do so many a day until you are thought. I find with my schedule and
workload realistically I can do about 20 per day.

Examine your expenses
. This is really important. In the press of work during the year you can find yourself subscribing to services and information you may not be using
or buying those office supplies that you never seem to run out of. Also look around for a better deal on things like ISP service; hosting service,
telephone costs (including better cell phone deals). Take a fine toothcomb through every single item on your expense list. I guarantee you will
find items to cut. When I did this last year I found over $1500 in expenses I was able to eliminate or reduce.

Find ways to automate more
. This is the opposite of the previous item. Automation saves you time and therefore money. But make sure it makes sense. Before signing up for a
new third-party service, figure out the return on investment. Look at your monthly profits. Divide that by the number of hours you work to find
your hourly cost. Now apply that to the time you will save and this will show you if there is a positive return on investment.

Find some time for general research
. The first quarter, January through March is the best time of year to find new products. There are a lot of trade shows in the first quarter.
Companies introduce new products early in the year. This is also a good time of year to start thinking about seasonal products. You can identify
products now that will be good sellers in the summer and get them ordered and in stock by late April.

Lastly, set your goals for the year
. How many new product SKUs are you going to add this year? What is your sales and income goal? What do you want to do for vacation this year? What
personal and/or family goals do you want to hit this year?

Just take some time to examine and reflect on both your business and your personal life and figure out what is important and what you want to
concentrate the most time and effort on.

So that is pretty much it. I am sure you can think of some things I forgot or things that are more important to your business model. Your factors may be
different than mine and that is OK - none of us approach our business in exactly the same way. But make sure you do something. Use the month of January for
research, planning and goal setting and it will pay dividends throughout the year.

It seems I write this same article every year about this time. Shortly most sellers will get notices from Amazon and PayPal that your 1099 forms are ready
to download. For some reason I don't understand this actually frightens a lot of sellers (I know because they send me emails).

The IRS 1099 form is nothing more than a statement from Amazon and/or PayPal that tells the IRS how much money they sent you last year. The amount on the
form is NOT the amount you own taxes on -and the IRS understands this too.

If you made more than $600 in 2014 then you will need to file this information with your federal tax return. Use your total sales as your starting point.
Now deduct the cost of the products you sold (don't forget to include the cost of inbound shipping). Subtract the cost from your sales and you will have
your gross margin.

Now subtract ALL eBay, PayPal and Amazon fees. (If you sell in FBA don't forget to subtract the cost to ship the goods into Amazon). Once you do this the
number you are left with is your net margin. But you still are not finished subtracting.

Here is an example of what we have done so far:

Total sales

$76,400

Cost of goods sold

31,200

Gross margin

45,200

Amazon, eBay and PayPal Fees

14,408

Net Margin

$30,792

The next things you want to look at are your ongoing business expenses. This is only a partial list - everyone's business is different. But look hard to
find every penny you spend on your business.

- Home office expense

- Telephone, ISP, etc.

- Web services

- Third party services such as Auctiva, Vendio, AutoMCF and so on.

- Office supplies, postage, shipping supplies

- Any business related travel (trips to trade shows, mileage to the post office and so on).

- Educational materials (these would include the cost of any books you bought from me or others about eBay and/or Amazon)

- Computer, printer, camera or any office equipment you bought during the year

- Any losses (did you write off any damaged product)

- Charitable contributions (this one usually goes under your personal taxes unless you have an LLC and the LLC made the contribution)

- Miscellaneous or anything else you can think of that I forgot to list here.

Now let us assume for example that these expenses came to a total of $12,900. Let's add that to our chart

Total sales

$76,400

Cost of goods sold

-31,200

Gross margin

45,200

Amazon, eBay and PayPal Fees

-14,408

Net Margin

30,792

Expenses

-12,900

Net profit

$17, 892

So that is the number you will owe taxes on. If you are a sole proprietor you will fill out an IRS form Schedule C (Form 1040) Profit or Loss from Business
and file that when you file your personal taxes.

If you are a corporation or LLC you will file these numbers as your profit and loss from business. If you are incorporated, make sure to file a subchapter
S form so the corporation or LLC does not pay taxes on the business profit. Instead the income from the corporation flows through to your personal taxes,
which will usually be a lower rate.

Lastly here is a hint from my CPA who is a former IRS executive. Always file an extension and do not file your taxes in April. Why? The IRS starts
assigning agents to do audits in April. If you wait until the October 15th deadline to fine, all of the agents who do audits are already
assigned and there are no more slots. Of course it has been over ten years since he worked at the IRS and they have hired a lot more people since then - so
its possible this may no longer work. But it can't hurt. Just remember one thing. When you send in your extension, be sure and include an estimate of what
your taxes will be, otherwise you will be charged interest and penalty on that amount.

Over the next few weeks surplus and liquidation companies will be getting a ton of new merchandise as stores unload their after Christmas excess
merchandise and get ready to bring in Spring seasonal goods. So for that reason I have featured several liquidation companies.

One word of caution: The liquidation companies I feature here are honest but you always want to make sure you know what you are getting.

The best type of merchandise is what are called Shelf Pulls or manufacturer's overstocks. Make sure you are not buying a load of returns, as these will
often contain defective or damaged goods.

Before you actually buy something don't be afraid to email the selling company and ask questions about the merchandise to make sure you understand exactly
what you are getting.

GENCO Marketplace
is a large and very well known liquidator used by lots of eBay and Amazon sellers.

Dollar Days
is also a liquidator that has been around a long time and is used by many online sellers.

Via Trading
is a very large liquidator and they give very good support if you communicate with them. I have personally bought from them and done quite well.

B & O Connections
offers direct pricing on Super-Blue stuff, the leading As Seen On TV pain relief formula.

AEWholesale
is family owned and operated. Hundreds and hundreds of products in stock in a wide range of categories! Candle lanterns, bird houses, tons of gifts, wind
chimes, home decor, impulse items, and much more.

Niki-Nu-Lites
- are made of translucent polycarbonate plastic, which is unbreakable and washable. Their Lanterns feature an Origami like design, which allows them to be
custom, made and are available in 3 different styles, multiple sizes & color combinations. Each lantern includes a U.L. approved cord and utilizes a
13-watt CFL bulb.

American Linens
is a family business based in New Jersey that has been operating for over 35 years. They carry a full line of household linens.

Vertex Airsoft
offers an extensive line of wholesale Airsoft guns and accessories.

Safety Technology
sells Stun Guns - Pepper Sprays - hidden cameras, spy equipment and surveillance systems. They will a Drop ship or you can order for shipment. Ask for
better pricing if you order in case lots.

Hollon Safe
is a manufacture of safes. They have a Drop ship program for all models of safes including depository safes, gun safes, home safes, and commercial safes.

Please Note:
Some of the products and
services mentioned in this website, in articles, banner ads and
newsletters and blog posts are for products and services for which I
earn a referral fee or commission. We always evaluate anything we
recommend very carefully and each year we turn down literally dozens
of opportunities to recommend products or services where we can earn
a commission. Even though we earn a fee on some of our
recommendations, we only recommend products and services that we
feel will deliver good value and with rare exceptions, they all come
with a money back guarantee.